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This is an interesting explanation of the well-known Chinese counterfeit market. I hadn’t considered the industry as a method of social stabilization in that access to quasi-luxury goods makes citizens feel more connected to economic growth. This clearly illustrates a cultural difference between the US and China, as possession of fake or imitation goods is frequently derided or looked down upon.

The lack of Chinese enforcement of intellectual property rights is stunning, from a Western point of view, because we take those rights so seriously. I found it interesting and bizarre that some believe the rights are weakly enforced precisely because of the size of the non-consumer market which shanzhai companies serve. That the Chinese government continues to turn a blind eye to this market is interesting, and one wonders at what point the government will intervene. As the country climbs closer to $10000, this market will be one to watch closely. As people begin to prosper more, will the government begin tightening down on its regulations? Or is the shanzhai market here to stay?

I think China’s transition into a service economy is inevitable, as a service-orientated economy is a trademark of all first world economies (including the United States). I also think it is inevitable that China’s industry output will eventually slow, as their annual growth rate has been unprecedented in history. I am definitely interested to see how the government reacts to this change and how they build policies that will support this transition.